We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Invesco FTSE RAFI Emerging Markets ETF (PXH) a Strong ETF Right Now?
Read MoreHide Full Article
The Invesco FTSE RAFI Emerging Markets ETF (PXH - Free Report) was launched on 09/27/2007, and is a smart beta exchange traded fund designed to offer broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $1.41 billion, this makes it one of the larger ETFs in the Broad Emerging Market ETFs. PXH is managed by Invesco. Before fees and expenses, this particular fund seeks to match the performance of the FTSE RAFI Emerging Markets Index.
The FTSE RAFI Emerging Index is designed to track the performance of the emerging market stocks with the highest ranking cumulative score, selected from the constituents of the FTSE Emerging Large/Mid Cap Index.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.50% for this ETF, which makes it on par with most peer products in the space.
PXH's 12-month trailing dividend yield is 4.58%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Taiwan Semiconductor Manufacturing Co Ltd accounts for about 3.68% of the fund's total assets, followed by Gazprom Pjsc (GAZP) and Hon Hai Precision Industry Co Ltd.
The top 10 holdings account for about 24.31% of total assets under management.
Performance and Risk
So far this year, PXH has added about 1.50%, and was up about 1.94% in the last one year (as of 02/24/2022). During this past 52-week period, the fund has traded between $21.24 and $24.30.
The fund has a beta of 0.80 and standard deviation of 23.30% for the trailing three-year period, which makes PXH a medium risk choice in this particular space. With about 419 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco FTSE RAFI Emerging Markets ETF is not a suitable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index. IShares Core MSCI Emerging Markets ETF has $74.45 billion in assets, Vanguard FTSE Emerging Markets ETF has $80.38 billion. IEMG has an expense ratio of 0.11% and VWO charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Invesco FTSE RAFI Emerging Markets ETF (PXH) a Strong ETF Right Now?
The Invesco FTSE RAFI Emerging Markets ETF (PXH - Free Report) was launched on 09/27/2007, and is a smart beta exchange traded fund designed to offer broad exposure to the Broad Emerging Market ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $1.41 billion, this makes it one of the larger ETFs in the Broad Emerging Market ETFs. PXH is managed by Invesco. Before fees and expenses, this particular fund seeks to match the performance of the FTSE RAFI Emerging Markets Index.
The FTSE RAFI Emerging Index is designed to track the performance of the emerging market stocks with the highest ranking cumulative score, selected from the constituents of the FTSE Emerging Large/Mid Cap Index.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.50% for this ETF, which makes it on par with most peer products in the space.
PXH's 12-month trailing dividend yield is 4.58%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Taiwan Semiconductor Manufacturing Co Ltd accounts for about 3.68% of the fund's total assets, followed by Gazprom Pjsc (GAZP) and Hon Hai Precision Industry Co Ltd.
The top 10 holdings account for about 24.31% of total assets under management.
Performance and Risk
So far this year, PXH has added about 1.50%, and was up about 1.94% in the last one year (as of 02/24/2022). During this past 52-week period, the fund has traded between $21.24 and $24.30.
The fund has a beta of 0.80 and standard deviation of 23.30% for the trailing three-year period, which makes PXH a medium risk choice in this particular space. With about 419 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco FTSE RAFI Emerging Markets ETF is not a suitable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
IShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index. IShares Core MSCI Emerging Markets ETF has $74.45 billion in assets, Vanguard FTSE Emerging Markets ETF has $80.38 billion. IEMG has an expense ratio of 0.11% and VWO charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.